TY - JOUR
AU - Krueger,Alan B.
AU - Angrist,Joshua D.
TI - Why do World War II Veterans Earn More Than Nonveterans?
JF - National Bureau of Economic Research Working Paper Series
VL - No. 2991
PY - 1989
Y2 - May 1989
DO - 10.3386/w2991
UR - http://www.nber.org/papers/w2991
L1 - http://www.nber.org/papers/w2991.pdf
N1 - Author contact info:
Alan B. Krueger
Industrial Relations Section
Firestone Library, Room A2H
Princeton University
Princeton, NJ 08544
Tel: 609/258-4046
Fax: 609/258-2907
E-Mail: akrueger@princeton.edu
Joshua Angrist
Department of Economics, E52-436
MIT
77 Massachusetts Avenue
Cambridge, MA 02139
Tel: 617/253-8909
Fax: 617/253-1330
E-Mail: angrist@mit.edu
M2 - featured in NBER digest on 1989-10-01
AB - Veterans of World War II are widely believed to earn more than nonveterans of the same age. Theoretical justifications for the World War II veteran premium include the subsidization of education and training, and preference for veterans in hiring. In this paper, we propose and test an alternative view: that the observed World War II veteran premium reflects the fact that men with higher earnings potential were more likely to have been selected into the Armed Forces. An empirical strategy is developed that allows estimation of the effects of veteran status while controlling for correlation with unobserved earnings potential. The estimation is based on the fact that from 1942 to 1947 priority for conscription was determined in chronological order of birth. Information on individuals' dates of birth may therefore be used to construct instruments for veteran status. Empirical results from the 1960, 1970, and 1980 Censuses, along with two other micro data sets, support a conclusion that World War II veterans earn no more than comparable nonveterans, and may well earn less. These results suggest that 015 estimates of the World War II veteran premium are severely biased by nonrandom selection into military service, and that the civilian labor market experiences of veterans of World War II were not very different from the experiences of Vietnam-era veterans.
ER -